Correlation Between CBL International and Keyera Corp
Can any of the company-specific risk be diversified away by investing in both CBL International and Keyera Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CBL International and Keyera Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBL International Limited and Keyera Corp, you can compare the effects of market volatilities on CBL International and Keyera Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CBL International with a short position of Keyera Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBL International and Keyera Corp.
Diversification Opportunities for CBL International and Keyera Corp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CBL and Keyera is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CBL International Limited and Keyera Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyera Corp and CBL International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CBL International Limited are associated (or correlated) with Keyera Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyera Corp has no effect on the direction of CBL International i.e., CBL International and Keyera Corp go up and down completely randomly.
Pair Corralation between CBL International and Keyera Corp
Given the investment horizon of 90 days CBL International is expected to generate 1.8 times less return on investment than Keyera Corp. In addition to that, CBL International is 2.96 times more volatile than Keyera Corp. It trades about 0.1 of its total potential returns per unit of risk. Keyera Corp is currently generating about 0.54 per unit of volatility. If you would invest 3,074 in Keyera Corp on August 27, 2024 and sell it today you would earn a total of 345.00 from holding Keyera Corp or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBL International Limited vs. Keyera Corp
Performance |
| Timeline |
| CBL International |
| Keyera Corp |
CBL International and Keyera Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBL International and Keyera Corp
The main advantage of trading using opposite CBL International and Keyera Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBL International position performs unexpectedly, Keyera Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Keyera Corp will offset losses from the drop in Keyera Corp's long position.| CBL International vs. Western Midstream Partners | CBL International vs. DT Midstream | CBL International vs. MPLX LP | CBL International vs. BP Prudhoe Bay |
| Keyera Corp vs. GasLog Partners LP | Keyera Corp vs. Dynagas LNG Partners | Keyera Corp vs. CBL International Limited | Keyera Corp vs. Imperial Petroleum Preferred |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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